Egypt prosecutor keeps job in blow to Mursi

* Mursi accused of exceeding powers

* Judges' petition keeps Mahmoud in post

CAIRO, Oct 13 (Reuters) - Egypt's public prosecutor said on

Saturday he will keep his job, in a blow to President Mohamed

Mursi who just two days ago sought to replace the Hosni

Mubarak-era official by appointing him as ambassador to the

Vatican.

Mursi's effort to remove Abdel Maguid Mahmoud from his post

was seen as a response to the acquittal of senior Mubarak-era

officials who had been standing trial on charges of organising

violence during the uprising against the deposed leader.

But the move triggered an outcry from judges who said Mursi

had exceeded his powers. Critics attacked the new president for

a step they described as an attack on the independence of the

judiciary.

Since he came to office as Egypt's first freely elected

president, Mursi has removed other Mubarak-era officials

including Field Marshal Hussein Tantawi, Mubarak's former

defence minister, and other top generals.

In an elaborate resolution of the crisis, the Supreme

Judicial Council presented Mursi with a petition on Saturday

demanding Mahmoud stay in his job. The presidency in turn said

Mursi would halt moves to make him an ambassador.

Al-Ahram, the state-run newspaper, declared it a "victory

for the judiciary over the presidency".

Vice President Mahmoud Mekky, who also serves as Mursi's

justice minister, told journalists that Mursi had appointed

Mahmoud as an ambassador with his consent, denying the president

had ever sacked him. He said the move was legally sound.

But perceptions that Mursi had tried to fire Mahmoud spread

widely, prompting commentators to ask where Mursi gets his legal

advise. "Since when has the president of the republic had the

capacity to sack the prosecutor general?" Suleiman Gouda,

writing in the widely read al-Masry al-Youm daily.

Mekky said the step had been designed to spare Mahmoud the

anger of families of the victims of the violence perpetrated

against demonstrators during the mass uprising against Mubarak.

Mahmoud has said he had faced intimidation to quit.

Arriving for work on Saturday, Mahmoud defiantly told

journalists he would only leave his post "via assassination".

On Wednesday, high profile members of the Mubarak

administration were cleared of any involvement in orchestrating

"The Battle of the Camels" - when men on horses and camels rode

into Tahrir Square in an attempt to dislodge protesters at the

height of the uprising against Mubarak.

The acquittals led to calls for protests on Friday by the

Muslim Brotherhood, the group which propelled Mursi to power.

But instead more than 140 people were injured when the Islamists

clashed with Mursi opponents who had already called for protests

against the president. The streets were calm on Saturday.

(Writing by Tom Perry; Editing by Jon Hemming)

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